More than 120 jobs face the axe at engineering giant Siemens’ Newcastle sites amid tough conditions in the energy market.

Staff at the Shields Road site – its Power Generation Services and Power and Gas UK & Ireland division – were told today of proposed changes to the business which would see the loss of 112 permanent employees and 14 on fixed-term contracts.

The proposed job losses represent more than a fifth of the firm’s 500-strong workforce on Shields Road.

The firm cited ongoing changes to the energy market in the UK, Ireland and overseas, the retirement of coal stations and the delay in new build combined cycle and gas turbine (CCGT) power stations for triggering a drop in work and a decline in profit for the Newcastle-based business, prompting the decision to reduce the workforce.

Darren Davidson, managing director at Siemens (Image: Siemens)

Siemens directors said the changes to the business structure are necessary to protect the long term future of the business, which has been on site on Newcastle for more than 125 years, and meet challenging energy market conditions.

They said the announcement also outlined plans for the business to begin consultation with employee representatives regarding terms and conditions to improve business flexibility and that Siemens is committed to full and open communication and is consulting fully with employees throughout the process.

The changes are expected to take place in three phases, concluding at the end of September 2019.

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Darren Davidson, managing director said: “Market conditions and increased competition has meant that unfortunately we need to resize our business to protect it for the long-term. Having had a presence on this site for over 125 years, we are committed to a future on the Newcastle site and are passionate about this business.

“These proposals are the result of a rigorous business and market review, the conclusion of this was that we need to resize to become more flexible and cost-effective.

“Our main concern is supporting our employees during this time and we aim to reduce the impact of these proposals as much as possible through voluntary redundancy and redeployment. This is undoubtedly a difficult time, but I strongly believe that these changes will result in us having a stronger, sustainable business in the future.”